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N.C. bill authorizes task force to examine rules on dental management companies

July 16, 2012

By Kelly Soderlund, ADA News staff

Raleigh, N.C.—The North Carolina legislature passed a dental practice bill that strengthens the state’s longtime law of prohibiting corporations from owning or controlling dental practices.

SB 655 was passed unanimously by the House of Representatives and received unanimous concurrence by the Senate in June and, as of press time, was on its way to the governor’s desk for a final signature. The bill gives the North Carolina Board of Dental Examiners additional safeguards and tools to enforce its current Dental Practice Act, which specifies that only licensed dentists may own, manage, supervise, control or conduct a dental practice.

“We think we’ve got a good statute in North Carolina,” said Dr. Alec Parker, executive director of the North Carolina Dental Society.

“It provides for adequate patient protection and states in no uncertain terms that only a dentist should be involved in making treatment decisions in consultation with the patient and not a for-profit corporation whose primary fiduciary responsibility is to its shareholders.”

The final bill was ultimately a compromise. Dental society leaders wanted to include more specific language about what a dental management service organization can or cannot do. It was a point of frustration for Dr. Parker, who thought by adding this clarifying language, the bill was satisfying what the DMSOs had been asking for all along.

“I think a bit of our frustration was that the dental service organizations had opined over the year that they needed greater clarity; that they felt like they were not sure sometimes what was going to be viewed by the dental board as an appropriate management arrangement or a compliant management arrangement,” Dr. Parker said.

The agreement comes more than a year after the bill was first filed. Often contentious, both sides hired lobbyists to drive their points home and spent money on TV ads and paper mailings. The NCDS received advice on how to lobby and negotiate the terms of the final bill from the American Dental Association’s State Public Affairs program. The SPA program is a way for the ADA to support state societies in developing their legislative agendas and public affairs initiatives.

“We don’t have any problem with dental service organizations that provide the back office services as long as they do so within the current law in North Carolina, which means they stay out of clinical decisions or administrative decisions that have a clinical impact,” Dr. Parker said.

The new bill creates a six-member task force—appointed by the state dental board—charged with scrutinizing the management arrangement rules.

The task force will consist of a member of the state dental board; an NCDS member; a licensed dentist with a current management arrangement with a dental service organization; a manager from a dental service organization with a current management arrangement with a North Carolina licensed dentist; a licensed attorney with knowledge and experience in North Carolina contract law, who is not affiliated with the dental industry; and a small business owner not affiliated with the dental industry.

The task force will make recommendations on how to change the rules’ language to the dental board, which then has 30 days to file its own recommendations to the General Assembly. The dental board does not have to follow the recommendations of the task force.

Dr. Parker is pleased with the idea of a task force since there’s now the potential for even greater clarity and to make sure there is no gray area where corporate decisions would trump appropriate care for patients.

“To us, this was about basic fiduciary responsibilities,” Dr. Parker said. “As dental professionals, their responsibility is first and foremost to their client or patient. Whereas, a corporation, by its very charter, their fiduciary responsibility is to its shareholders. We just think it’s kind of an oil and water situation that doesn’t mix unless proper controls are in place.”

Representatives from groups supporting dental management service organizations were also pleased with the outcome.

“The passage of Senate Bill 655 is a victory for North Carolina citizens—their access to quality dental care has been preserved. Working in collaboration with members of the N.C. General Assembly, the North Carolina Board of Dental Examiners and the North Carolina Dental Society, the Alliance for Access to Dental Care was able to forge a compromise bill that brought all parties to a common agreement. This bill maintains dental service organizations’ ability to handle administrative functions for affiliated dentists so they have more time to focus on patient care,” said Doug Brown, CEO of Affordable Care Inc. and a member of the Alliance, a trade and advocacy group. “The legislation and resulting task force have set a tone of collaboration for a new framework that can bring multiple points of view together. We look forward to moving forward with implementation of aspects of the legislation and ensuring unfettered access to high quality care.”

Dr. Edward Meckler, executive director of the Dental Group Practice Association, also praised the formation of a task force.

“This task force could serve as a model for other states, dental societies and dental service organizations to come together and map an operating framework,” Dr. Meckler said. “If other jurisdictions look to North Carolina, they would be wise to embrace the task force planning model, if they are considering or beginning lobbying or legislative drafting.”